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2012-10-01_Lecture#4-The Politics of ISI + Populism.docx

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University of Toronto St. George
Political Science
Roberta Rice

Lecture #3-The Politics of ISI + Populism  The first time the elitist class was challenged and the middle class was opened up. We begin by looking at the development model of this time.  This time period is in the 1930s and onwards  There was World War II and there was the Great Depression. ISI- Import Substitution industrialization  A strategy of industrial development based on manufacturing goods domestically that were previously imported.  This is also known as protectionism o E.g. It involves tariffs or taxes on imports. Quotas or limits on imports. There were also tax incentives + direct subsidies to local industries in Latin America. Moreover, there were monetary systems Merits  Form of economic independence/self sufficiency o They wanted to break the cycle of selling cheap raw materials while buying high end industrialized goods which means they were In a deficit.  Politically popular o General public can buy expensive items nowadays. Rich class and middle class/working class are able to buy these goods.  Improvements in social + economic indicators o Better standard of living, life expectancy grew from 52 to 64 years, infant mortality dropped, region had 6% growth, established a manufacturing base Limitations of the system  Initially successful at jumpstarting economy but long term there was unravellling.  Sectoral disparities overtime o Some industries were not protected and they went out of business o Over time, the industries that were dependent on governments were not efficient nor their goods good.  Inefficient Production o No incentive to innovate to become cheaper and faster…products become less competitive since they are dependent on government o They chose the wrong industries, like developing an airline  Disappointing industrial employment results o No job creationpeople cannot buy products-Small domestic markets limited growthas a result no profit.  Countryside were not distributed…Peasants were stuck in the Asante system o Over time, how many refrigerators, televisions etc…do people need to buy? THe market has been run dry.  At the end, Latin America became VERY dependent on loans (which was not a good thing) Cristobal Kay (2002) “Why East Asia overtook Latin America”  TimingLA were more poised, far greater natural resources, closer to US, industrialized earlier than East Asian tigers. They should have risen but they have not (HK, Singapore, Taiwan, SK)  1980s, East Asian tigers grew while LA stagnated.  EA tigers switched to EOI rather than being stuck with ISI. Export oriented Industrialization (EOI)  Industrialization strategy that is heavily tied to expanding manufactured goods.  EA tigers did this in the 1960s and timing was key  Great period of expansion.  BUT LA, was closed off in 1960s but they failed in expanding even though they had a 20 year head up on East Asian tigers.  BY 1980s, LA were now behind EA tigers and now they cannot repeat the path EA tigers took. Why did Latin America stay with ISI for so long, even when it was failing them?  US needed them to do so such that they have the materials to produce weapons etc… Scial and political changes  Emergence of middle class  Rise of an urban working class “unionization and Mobilization”  Increase ddemands for political participation and social inclusion. This is known as the social question: “Social Question”  Debate over the appropriate role of the urban working classes within the economic and political system in early 20 century Latin America. Corporatism and Clientism  Corporatisma system in which interest groups become an institutionalized part of the political structure. o Pressuring government policy (multiple groups) o Europeans have corporatism and have itnereste groups to consult with government about policies  State corporatism System of interest group representation in which the state uses interest group structures to control and dominate citizen groups and the interests they are allowed to voice. Corporatism Characteristics 
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